Question: With the roller coaster-volatility of the stock market, would it be wise to tell my investment management firm to sell all mutual fund investments once they get a bit higher and place everything into U.S. Savings Bonds? It would seem to be simultaneously both a patriotic and a "stick-it-to-Wall-Street" thing... Lee, Memphis, TN
However, I'm extremely wary of putting all your investment eggs in one investment product--no matter how creditworthy.
One reason I always recommend diversification is that there's no way to know what will happen in the markets. Some investment will zig while others zag.
For instance, I happen to think there are good values in the stock market for the long-term investors, as well as the housing market. (By long-term investor I mean an investment horizon of at least 7 to 10 years for taking on extra investment risk.) Of course, both markets will continue to struggle in the near-term. That said, I could be really wrong, so I diversify.
Yet there is nothing wring with being even more conservative with your money. The counsel that equities should be included in a long-term retirement portfolio owes a huge debt to the work of Paul Samuelson, the late Nobel laureate. Yet in an interview I had with him about a decade ago, he said, "there are lots of reasons to have an equity share which is significant. But it all depends on your risk tolerance. For my late mother, her level of risk tolerance called for a very small equity share. You have to always sell down to the sleeping point."
So, sell down to the sleeping point and put the money into safe assets.
But before you do anything I'd spend time thinking about what it's you want to do with your life in coming years. What are your goals, your ambitions, your job and career prospects? I would then match your money portfolio up to the rhythm of your life rather than the other way around.